Owners of small and medium size businesses are being offered an alternative way of accessing funds as many complain banks are still reluctant to give loans.

A new survey by Bibby Financial Services shows an increasing number of business owners are relying on their own savings or loans from family and friends.

The firm is urging company bosses to consider using funding methods such as invoice finance to help with cash flow.

Richard Hill, Bibby’s spokesman for the South East, told the Reading Post accessing funding is still one of the most common problems facing business.

He said: “Our networking events in Reading once a quarter have about 90 to 100 people mainly coming through accountancy services and the events have been warmly welcomed by them.

“It doesn’t feel like the money coming from the Government to the banks is getting through to the grass roots.

“We think its very important to get the message out that you can go to the bank, but don’t just think the only other source of funding is through friends and family.”

The company’s recent survey during the second quarter of 2012 showed 22 per cent of businesses in the South East were reliant on personal savings and loans from friends and family.

Only 19 per cent used a bank loan, but 65 per cent had not applied for any form of funding to support their business.

Invoice financing works through firms, such as Bibby, paying a company the money owed by its debtors and then taking responsibility for collecting the cash back itself.

This can help with the cash flow for an SME or even provide a big enough injection of cash to help fund investment in a bigger company.

Mr Hill said another recent Bibby survey found an increase in optimism among businesses in the South East and he felt Reading and the Thames Valley will be at the heart of the economic upturn.

But he said businesses need to have a robust commercial strategy and investigate all funding options.

Mr Hill said: “These should include alternative facilities such as invoice finance, which is a form of funding that will adapt to your business as it grows, by advancing funds based on the value of outstanding sales invoices without the burden of taking on more debt.”